Business 24 August 2026 Daily Monitor (Uganda)
Stanbic Bank Wins Three-Decade Legal Battle Against Western Highland Creameries
The Supreme Court has ended a 30-year legal dispute between Stanbic Bank and Western Highland Creameries, upholding a Court of Appeal decision in favour of the bank. The case, which began with a Shs945.2m loan in 1995, involved allegations of fraud, receivership, and a significant dispute over lawyers' fees. Source: https://www.monitor.co.ug/uganda/business/markets/stanbic-western-highland-three-decade-court-battle-5568950
A protracted legal battle spanning three decades between Stanbic Bank and Western Highland Creameries, alongside businessman Lee Ngugi, has reached its conclusion. The Supreme Court, in a ruling on August 7, dismissed an appeal by Western Highland Creameries and Ngugi, affirming a previous Court of Appeal decision that favoured Stanbic Bank.
The dispute originated in 1995 with a Shs945.2 million loan extended by Stanbic to Western Highland Creameries. This financing was secured by a debenture over the company’s assets and a mortgage on land. Additional credit facilities were provided in 1997, further secured by company land and a guarantee from the National Bank of Kenya.
Following the borrowers’ default on repayment obligations, Stanbic appointed a receiver and manager in 2001. Approximately a decade later, Western Highland Creameries and Ngugi initiated legal action, challenging the enforcement of securities, the receiver’s appointment, and the subsequent sale of mortgaged property. They alleged fraud and illegality in the transactions.
The High Court initially dismissed the case, citing legal technicalities. This led to Stanbic submitting a substantial bill of costs, which itself became a point of contention. The assessment of lawyers’ instruction fees, calculated based on the value of the claims in the borrowers’ lawsuit, escalated significantly, leading to multiple rounds of taxation and appeals.
The core issue at the Supreme Court revolved around how legal fees should be determined in high-value commercial cases resolved on preliminary points without a full trial. Western Highland and Ngugi argued that using their original lawsuit’s substantial monetary claims to calculate Stanbic’s instruction fees was unreasonable. Stanbic, however, contended that the value of the subject matter, ascertainable from the pleadings, should be considered as per remuneration rules.
Justice Monica Mugenyi, writing for the Supreme Court, sided with Stanbic, holding that the value of the subject matter can be used to assess instruction fees regardless of whether a case goes to full trial, provided that value is established from the pleadings. The court acknowledged the “colossal sums of money” involved in the litigation. However, the Supreme Court also emphasized that taxing officers have discretion beyond mere calculation, considering factors like skill, labour, and responsibility, ensuring costs are not unreasonably high.
While the appeal was dismissed and Stanbic was awarded costs in all three courts, the precise amount of legal costs payable is still subject to fresh taxation. Western Highland and Ngugi’s argument for an immediate refund of collected costs was rejected, as the final amount due must first be determined, with any excess to be refunded if an overpayment is found.